J.Jill, Inc.

Previous wording

Tariffs. The imposition of tariffs (including U.S. tariffs imposed or threatened to be imposed on a number of countries and any tariffs imposed by such countries) have impacted and could continue to impact our supply chain resulting in increased input costs, including the cost of certain raw materials and packaging. During the thirteen weeks ended May 2, 2026, the U.S. Supreme Court ruled that many of the tariffs previously imposed under the International Emergency Economic Powers Act were invalid. The ultimate availability, timing, and amount of any potential refunds of such tariffs remain highly uncertain and are subject to further legal, regulatory, and administrative developments. In addition, the U.S. Administration initiated new tariffs and may impose additional tariffs. As a result, there remains significant uncertainty regarding the duration and scope of existing and future tariffs and the impact of such tariffs will continue to vary, including based on where inputs are sourced from and shipped to. In addition, any supply chain constraints, inflationary impacts or reduced consumer demand for our products as a result of such tariffs or ongoing macroeconomic uncertainty have impacted and could continue to impact our results. We will continue to evaluate the nature and extent of the impact of these tariffs on our business, to identify actions to potentially mitigate, where possible, any unfavorable impacts on our business and to monitor the regulatory and administrative developments around the potential refund of tariffs previously paid and assess their impact on our future results.

Current wording

Tariffs. The imposition of tariffs (including U.S. tariffs imposed or threatened to be imposed on a number of countries and any tariffs imposed by such countries) have impacted and could continue to impact our supply chain resulting in increased input costs, including the cost of certain raw materials and packaging. In February 2026, the U.S. Supreme Court ruled that many of the tariffs previously imposed under the International Emergency Economic Powers Act were invalid. Following the Supreme Court ruling, the Court of International Trade issued an order directing Customs and Border Protection (“CBP”) to begin paying refunds for tariffs enacted under the International Emergency Economic Powers Act (“IEEPA”) immediately. The CBP developed a new system to process IEEPA tariff refunds and has commenced a phased rollout of refunds. Subsequent to year-end, the Company submitted refund claims to CBP related to tariffs previously paid under the IEEPA. These claims were submitted following court rulings that invalidated certain IEEPA tariffs and directed CBP to implement a refund process. During the thirteen weeks ended August 1, 2026, the Company began receiving refunds and recognized recoveries prospectively as they became realizable. The ultimate amount and timing of additional refunds remain subject to the ongoing administrative implementation of the refund process by the CBP. The refunds were recognized as a reduction of cost of goods sold in the Company's condensed consolidated statements of operations. Additionally, a portion of tariff recoveries is recorded within accrued liabilities. Further, in July 2026, the U.S. administration announced plans to implement additional tariffs under Section 301 of the Trade Act of 1974 and could take action to implement additional tariffs in the future. We will continue to evaluate the nature and extent of the impact of these tariffs on our business, to identify actions to potentially mitigate, where possible, any unfavorable impacts on our business and to monitor the regulatory and administrative developments around the potential refund of tariffs previously paid and assess their impact on our future results.

Previous wording

Risks Associated with Ongoing Conflicts. Ongoing or escalating geopolitical tensions and military activity, including conflicts involving the Middle East, Iran, Ukraine, and Venezuela, may adversely affect the Company’s business, financial condition, and results of operations. Heightened geopolitical instability in the Middle East has contributed to uncertainty in global economic and financial conditions, including potential constraints affecting key shipping routes such as the Strait of Hormuz, and increased volatility in energy, fuel, and transportation markets, as well as contributing to volatility in labor, financial, and commodity markets. These developments may disrupt global supply chains, including the availability and cost of fuel, energy, transportation, and other critical materials, which would have an adverse effect on our results of operations. Disruptions to fuel and energy supply, including as a result of government‑imposed restrictions, sanctions, export controls, or other regulatory actions, could materially increase the Company’s operating costs or require the temporary suspension or shutdown of certain mining operations where reliable access to fuel or power is essential to safe and continuous operations. Heightened geopolitical tensions may also increase cybersecurity risks, including threats to energy infrastructure, logistics providers, financial systems, and other third‑party service providers.

Current wording

Risks Associated with Ongoing Conflicts. Ongoing or escalating geopolitical tensions and military activity, including conflicts involving the Middle East, Iran, and Ukraine, may adversely affect the Company’s business, financial condition, and results of operations. Heightened geopolitical instability in the Middle East has contributed to uncertainty in global economic and financial conditions, including potential constraints affecting key shipping routes such as the Strait of Hormuz, and increased volatility in energy, fuel, and transportation markets, as well as contributing to volatility in labor, financial, and commodity markets. These developments may disrupt global supply chains, including the availability and cost of fuel, energy, transportation, and other critical materials, which would have an adverse effect on our results of operations. Disruptions to fuel and energy supply, including as a result of government‑imposed restrictions, sanctions, export controls, or other regulatory actions, could materially increase the Company’s operating costs or require the temporary suspension or shutdown of certain mining operations where reliable access to fuel or power is essential to safe and continuous operations. Heightened geopolitical tensions may also increase cybersecurity risks, including threats to energy infrastructure, logistics providers, financial systems, and other third‑party service providers.

Previous wording

Retail contributed 54.4% of our net sales in the thirteen weeks ended May 2, 2026 and 53.3% in the thirteen weeks ended May 3, 2025. Our Direct channel contributed 45.6% of our net sales in the thirteen weeks ended May 2, 2026 and 46.7% in the thirteen weeks ended May 3, 2025.

Current wording

Retail contributed 52.9% of our net sales in the thirteen weeks ended August 1, 2026 and 53.6% in the thirteen weeks ended August 2, 2025. Our Direct channel contributed 47.1% of our net sales in the thirteen weeks ended August 1, 2026 and 46.4% in the thirteen weeks ended August 2, 2025.

Previous wording

Gross profit for the thirteen weeks ended May 2, 2026 decreased $11.7 million, or 10.6%, to $98.7 million from $110.4 million for the thirteen weeks ended May 3, 2025. The gross margin for the thirteen weeks ended May 2, 2026 was 68.3% compared to 71.8% for the thirteen weeks ended May 3, 2025. The decrease in gross profit and gross margin for the thirteen weeks ended May 2, 2026 was driven by higher full-price promotional rates, higher mix of markdown sales, and increased tariffs compared to the thirteen weeks ended May 3, 2025.

Current wording

Gross profit for the thirteen weeks ended August 1, 2026 increased $13.6 million, or 12.9%, to $119.0 million from $105.4 million for the thirteen weeks ended August 2, 2025. The gross margin for the thirteen weeks ended August 1, 2026 was 76.8% compared to 68.4% for the thirteen weeks ended August 2, 2025. The increase in gross profit and gross margin for the thirteen weeks ended August 1, 2026 was primarily driven by a lower mix of markdown sales, lower full-price promotional rates, and decreased expense, including the recognition of refunds related to tariffs previously paid, compared to the thirteen weeks ended August 2, 2025.

Previous wording

As a percentage of net sales, SG&A expenses were 62.1% for the thirteen weeks ended May 2, 2026 and 59.3% for the thirteen weeks ended May 3, 2025.

Current wording

As a percentage of net sales, SG&A expenses were 61.1% for the thirteen weeks ended August 1, 2026 and 57.5% for the thirteen weeks ended August 2, 2025.

Previous wording

The Company recorded $0.2 million of impairment charges for the thirteen weeks ended May 2, 2026 and May 3, 2025.

Current wording

For the thirteen weeks ended August 1, 2026 and August 2, 2025 the Company recorded an immaterial amount of impairment charges.

Previous wording

Interest expense was $1.9 million and $2.8 million for the thirteen weeks ended May 2, 2026 and May 3, 2025, respectively. The decrease was due to a lower interest rate for the thirteen weeks ended May 2, 2026 as a result of the debt refinancing that took place in December 2025.

Current wording

Interest expense was $1.9 million and $2.7 million for the thirteen weeks ended August 1, 2026 and August 2, 2025, respectively. The decrease was due to a lower debt balance for the thirteen weeks ended August 1, 2026.

Previous wording

The income tax provision was $2.5 million for the thirteen weeks ended May 2, 2026 compared to $5.0 million for the thirteen weeks ended May 3, 2025, while our effective tax rates for the same periods were 35.2% and 29.8%, respectively. The effective tax rate during the thirteen weeks ended May 2, 2026 is higher primarily due to the impact of state and local income taxes, stock compensation shortfalls and executive compensation limitations.

Current wording

The Company’s income tax provision was $6.7 million for the thirteen weeks ended August 1, 2026 compared to $4.0 million for the thirteen weeks ended August 2, 2025, while our effective tax rates for the same periods were 28.6% and 27.7%, respectively. The effective tax rate during the thirteen weeks ended August 1, 2026 is higher primarily due to the impact of state and local income taxes, stock compensation shortfalls and executive compensation limitations.

Previous wording

Net sales for the thirteen weeks ended May 2, 2026 decreased $9.2 million, or 6.0%, to $144.4 million from $153.6 million for the thirteen weeks ended May 3, 2025. At the end of those same periods, we operated 255 and 249 retail stores, respectively. The decrease in net sales was primarily due to a decrease in total company comparable sales of 8.7%, the decrease was primarily driven by a decline in unit sales partially offset by an increase in the average unit retail price compared to the thirteen weeks ended May 3, 2025.

Current wording

Net sales for the twenty-six weeks ended August 1, 2026 decreased $8.4 million, or 2.7%, to $299.3 million from $307.6 million for the twenty-six weeks ended August 2, 2025. At the end of those same periods, we operated 255 and 247 retail stores, respectively. The decrease in net sales was primarily due to total company comparable sales decrease of 4.2%. The decrease was primarily driven by a decline in unit sales partially offset by an increase in average unit retail price compared to the twenty-six weeks ended August 2, 2025.

Previous wording

For the thirteen weeks ended May 2, 2026, the Company earned interest on cash of $0.3 million, compared to $0.4 million for the thirteen weeks ended May 3, 2025. The decrease was primarily due to lower interest rate for the thirteen weeks ended May 2, 2026.

Current wording

For the twenty-six weeks ended August 1, 2026, the Company earned interest on cash of $1.5 million, compared to $0.9 million for the twenty-six weeks ended August 2, 2025. The increase in earned interest is primarily due to higher cash balances.

Previous wording

Our primary sources of liquidity and capital resources are cash and cash equivalents generated from operating activities and availability under our ABL Facility, so long as certain conditions related to the maturity of the 2025 Term Loan Credit Agreement are met. As of May 2, 2026, we had $36.3 million in cash and $35.7 million of total availability under our ABL Facility. In addition, through our shelf registration statement on file with the SEC or through private transactions, and depending on conditions prevailing in the public and private capital markets, we may from time to time issue equity securities in one or more series in one or more offerings.

Current wording

Our primary sources of liquidity and capital resources are cash and cash equivalents generated from operating activities and availability under our ABL Facility, so long as certain conditions related to the maturity of the 2025 Term Loan Credit Agreement are met. As of August 1, 2026, we had $76.9 million in cash and $35.7 million of total availability under our ABL Facility. In addition, through our shelf registration statement on file with the SEC or through private transactions, and depending on conditions prevailing in the public and private capital markets, we may from time to time issue equity securities in one or more series in one or more offerings.

Previous wording

On December 12, 2025, the Company and Jill Acquisition LLC (the “Borrower”) entered into a new Term Loan Credit Agreement (the “2025 Term Loan Credit Agreement”), with the lenders party thereto from time to time and CCP Agency, LLC, as administrative agent and as collateral agent. The 2025 Term Loan Credit Agreement provides for a senior secured term loan facility in an aggregate principal amount of $75.0 million with a maturity date of December 12, 2030 (the “2025 Term Loan Facility”). As of May 2, 2026, the outstanding principal balance under the 2025 Term Loan Credit Agreement was $74.5 million.

Current wording

On December 12, 2025, the Company and Jill Acquisition LLC (the “Borrower”) entered into a new Term Loan Credit Agreement (the “2025 Term Loan Credit Agreement”), with the lenders party thereto from time to time and CCP Agency, LLC, as administrative agent and as collateral agent. The 2025 Term Loan Credit Agreement provides for a senior secured term loan facility in an aggregate principal amount of $75.0 million with a maturity date of December 12, 2030 (the “2025 Term Loan Facility”). As of May 2, 2026, the outstanding principal balance under the 2025 Term Loan Credit Agreement was $74.1 million.

Previous wording

The 2025 Term Loan Facility is to be repaid in quarterly payments of approximately $0.5 million on the last business day of each fiscal quarter of the borrower, commencing with the fiscal quarter ended May 2, 2026, until January 30, 2027 and of approximately $0.2 million commencing on the fiscal quarter ending May 1, 2027 and each fiscal quarter thereafter, with the remaining aggregate principal amount of Initial Term Loans then outstanding to be paid on maturity on December 12, 2030. Additionally, the 2025 Term Loan Facility is subject to mandatory repayment, subject to certain exceptions, including (i) 100% of the net proceeds of any issuance or incurrence of indebtedness other than debt permitted in the 2025 Term Loan Credit Agreement, (ii) 100% of the net cash proceeds of certain asset sales/insurance proceeds, subject to reinvestment rights and certain other exceptions, and (iii) an annual payment ranging from 25%-75%, based on the First Lien Net Leverage Ratio, of the annual Excess Cash Flow, less certain voluntary prepayments made during the year, as defined in the 2025 Term Loan Credit Agreement.

Current wording

The 2025 Term Loan Facility is to be repaid in quarterly payments of approximately $0.5 million on the last business day of each fiscal quarter of the borrower, commencing with the fiscal quarter ended May 2, 2026, until January 30, 2027 and of approximately $0.2 million commencing on the fiscal quarter ending May 1, 2027 and each fiscal quarter thereafter, with the remaining aggregate principal amount of Initial Term Loans (as defined in the 2025 Term Loan Credit Agreement) then outstanding to be paid on maturity on December 12, 2030. Additionally, the 2025 Term Loan Facility is subject to mandatory repayment, subject to certain exceptions, including (i) 100% of the net proceeds of any issuance or incurrence of indebtedness other than debt permitted in the 2025 Term Loan Credit Agreement, (ii) 100% of the net cash proceeds of certain asset sales/insurance proceeds, subject to reinvestment rights and certain other exceptions, and (iii) an annual payment ranging from 25%-75%, based on the First Lien Net Leverage Ratio, of the annual Excess Cash Flow, less certain voluntary prepayments made during the year, as defined in the 2025 Term Loan Credit Agreement.

Previous wording

As of May 2, 2026, the Company is in compliance with all covenants contained in its outstanding debt arrangements.

Current wording

As of August 1, 2026, the Company was in compliance with all covenants contained in its outstanding debt arrangements.

Previous wording

$1.7 million. The change in operating assets and liabilities was driven primarily by decreased payments for inventory of $5.4 million, due to the timing of receipt of goods and tariffs, accrued expenses and other current liabilities of $0.9 million, operating lease assets and liabilities of $0.8 million due primarily to lease amortization, and accounts receivable of $0.2 million. The change in operating assets and liabilities was offset by lower cash inflows relating to timing of payments for accounts payable of $6.2 million, largely reflecting higher merchandising payables, prepaid expenses and other current assets of $0.9 million, and timing of payments relating to other noncurrent assets of $0.4 million.

Current wording

Net cash provided by operating activities increased by $23.3 million during the twenty-six weeks ended August 1, 2026 compared to the twenty-six weeks ended August 2, 2025. The increase during the twenty-six weeks ended August 1, 2026 was driven by changes in operating assets and liabilities of $25.0 million, offset by adjustments to reconcile net income of $1.0 million and a decrease in net income of $0.7 million. The change in operating assets and liabilities was driven primarily by an increase in accrued expenses and other current liabilities of $16.0 million, which includes liabilities to vendors resulting from tariff recoveries, decreased payments for inventory of $11.4 million, an increase in prepaid expenses and other current assets of $8.2 million, and increases in operating leases assets and liabilities of $0.9 million. The change in operating assets and liabilities was offset by lower cash inflows relating to timing of payments for accounts payable of $10.4 million, largely reflecting higher merchandising payables, the timing of payments relating to other noncurrent assets of $1.0 million, and a decrease in accounts receivable of $0.1 million.

Previous wording

Net cash provided by operating activities during the thirteen weeks ended May 2, 2026 was $1.7 million. Key elements of cash provided by operating activities were (i) net income of $4.7 million, (ii) adjustments to reconcile net income to net cash provided by operating activities of $7.6 million, primarily driven by depreciation and amortization, and equity-based compensation, and (iii) uses of cash totaling $10.6 million for net operating assets and liabilities.

Current wording

Net cash provided by operating activities during the twenty-six weeks ended August 1, 2026 was $48.0 million. Key elements of cash provided by operating activities were (i) net income of $21.5 million, (ii) adjustments to reconcile net income to net cash provided by operating activities of $15.7 million, primarily driven by depreciation and amortization, equity-based compensation, and changes in deferred taxes, and (iii) uses of cash totaling $10.8 million for net operating assets and liabilities.

Previous wording

Net cash provided by operating activities during the thirteen weeks ended May 3, 2025 was $5.3 million. Key elements of cash provided by operating activities were (i) net income of $11.7 million, (ii) adjustments to reconcile net income to net cash provided by operating activities of $5.9 million, primarily driven by depreciation and amortization, and equity-based compensation, and (iii) uses of cash totaling $12.3 million for net operating assets and liabilities.

Current wording

Net cash provided by operating activities during the twenty-six weeks ended August 2, 2025 was $24.7 million. Key elements of cash provided by operating activities were (i) net income of $22.2 million, (ii) adjustments to reconcile net income to net cash provided by operating activities of $16.7 million, primarily driven by depreciation and amortization, loss on extinguishment of debt, equity-based compensation, and (iii) uses of cash totaling $14.2 million for net operating assets and liabilities.

Previous wording

Net cash used in investing activities during the thirteen weeks ended May 2, 2026 and the thirteen weeks ended May 3, 2025 was $2.8 million and $2.7 million, respectively, representing purchases of property and equipment related investments in stores and software and technology related investments.

Current wording

Net cash used in investing activities during the twenty-six weeks ended August 1, 2026 and August 2, 2025 was $5.0 million and $5.5 million, respectively, representing purchases of property and equipment related investments in stores and software and technology related investments.

Previous wording

Net cash used in financing activities was $3.6 million for the thirteen weeks ended May 2, 2026 compared to $6.8 million for the thirteen weeks ended May 3, 2025. Net cash used in financing activities for the thirteen weeks ended May 2, 2026 consisted primarily of the quarterly cash dividend paid to shareholders, share repurchase costs, net of commission and fees, surrender of shares to pay withholding taxes, and principal repayments on the 2025 Term Loan. Net cash used in financing activities for the thirteen weeks ended May 3, 2025 consisted primarily of share repurchase costs, net of commission and fees, surrender of shares to pay withholding taxes, and quarterly cash dividend paid to shareholders.

Current wording

Net cash used in financing activities was $7.0 million for the twenty-six weeks ended August 1, 2026 compared to $9.1 million for the twenty-six weeks ended August 2, 2025. Net cash used in financing activities for the twenty-six weeks ended August 1, 2026 consisted primarily of the quarterly cash dividend paid to shareholders, share repurchase costs, net of commission and fees, surrender of shares to pay withholding taxes, and principal repayments on the 2025 Term Loan. Net cash used in financing activities for the twenty-six weeks ended August 2, 2025 primarily consisted of share repurchase costs, net of commission and fees, surrender of shares to pay withholding taxes, and quarterly cash dividend paid to shareholders.

Previous wording

During the thirteen weeks ended May 2, 2026, the Board declared a quarterly cash dividend payment of $0.09 per share of common stock (the “Dividend”). The Dividend was payable on April 28, 2026 to stockholders of record of issued and outstanding shares of the Company’s common stock as of April 14, 2026. During the thirteen weeks ended May 2, 2026, the Company paid $1.3 million in dividends. While dividends are generally recorded as a reduction to Retained earnings, since the Company has an accumulated deficit, dividends are recorded as a reduction to Additional paid-in capital.

Current wording

During the thirteen weeks ended August 1, 2026, the Board declared a quarterly cash dividend payment of $0.09 per share of common stock (the “Dividend”). The Dividend was payable on July 8, 2026 to stockholders of record of issued and outstanding shares of the Company’s common stock as of June 24, 2026. During the thirteen and twenty-six weeks ended August 1, 2026, the Company paid $1.4 million and $2.7 million, respectively, in dividends. While dividends are generally recorded as a reduction to Retained earnings, since the Company has an accumulated deficit, dividends are recorded as a reduction to Additional paid-in capital.

Previous wording

The Company’s contractual obligations consist primarily of debt obligations, interest payments, operating leases, purchase orders for merchandise inventory, and cloud computing related agreements. These contractual obligations impact the Company’s short-term and long-term liquidity and capital resource needs.

Current wording

The Company’s contractual obligations consist primarily of debt obligations, interest payments, operating leases, and purchase orders for merchandise inventory, and cloud computing related agreements. These contractual obligations impact the Company’s short-term and long-term liquidity and capital resource needs.